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Silver loses traction ahead of Powell speech

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Silver is attracting some sellers to near $31.55 during the Asian session on Monday, with the improved risk sentiment in markets triggering some profit-taking in XAGUSD. Traders will keep an eye on Federal Reserve Chair Jerome Powell’s speech later on Monday.

The upbeat mood could exert some selling pressure on the white metal as traders await the fresh catalysts. The Fed Chair’s speech might offer some hints about the US interest rate outlook for this year.

The People’s Bank of China (PBoC) Governor Pan Gongsheng announced new stimulus measures to revive a flagging property sector and low domestic demand in the country.

Also, the PBoC stated the central bank would reduce the amount of reserves banks are required to keep.

“Silver is going to continue to rally over the coming quarters because of the consecutive rate cuts and as China’s stimulus could continue for some time,” said Amelia Xiao Fu, head of commodity markets at BOCI.

Additionally, hopes of another large US rate cut provide some support for silver. According to the CME FedWatch Tool, interest rate futures contracts have priced in a nearly 54% odds of a half-point cut in November, while the possibility of a quarter-point cut stands at 46%.

Meanwhile, Israel’s killing of Hezbollah leader Hassan Nasrallah has further fuelled geopolitical tensions in the Middle East and intensified the war at its border with Lebanon.

The Iran-backed militant group says it will continue to fight, even as a growing number of senior Hezbollah figures have been killed, per CNN. The rising geopolitical tensions in the Middle East could boost XAGUSD.

(Source: OANDA)